NBR's bottomless sack of dollars

The Romanian market seems to be benefiting from a bottomless sack of dollars. The National Bank of Romania has no problem increasing its hard currency reserve while it is also servicing the foreign debt.

NBR foreign currency reserve gained 199.2 million dollars in March, reaching 2.8 billion dollars. The central bank managed to increase its reserves by 1 billion dollars in 2000 and by about 2 billion dollars over the past two years.

NBR international reserves, gold and hard currency, registered the peak value of 3.7 billion dollars. The 199.2 million-dollar increase comes from the 139.8 million-dollar inflows from the hard currency denominated state bonds issued by the Finance Ministry on the domestic market, as well as from the 122.1 million dollars purchased by the Central Bank from the foreign exchange market. Revenues derived from the international reserve administration amounted to 18.3 million dollars.

NBR in March paid 65.8 million dollars as due instalments and interest rates for the foreign debt, direct and guaranteed by the Finance Ministry.

The hard currency denominated outflows (the modification of the minimum compulsory deposits of commercial banks, hard currency transfers to the state reserve, payments standing for fees, banking commissions and others) were worth 15.2 million dollars.

NBR gold reserve maintained at 105.0 tonnes last month, but, following price fluctuations on the international markets, its real value dropped to 874.3 million dollars, while NBR international reserves totalled 3.7 billion dollars.

The value of due payments for the direct and Finance Ministry guaranteed foreign debts, to be serviced by the end of 2001, amounts to 1.1 billion dollars. Total debts, both public and private, stand at about 3 billion dollars for this year.

NBR officials say there are no reasons for concern as the hard currency reserve allows the bank to make the payments without any difficulties. According to NBR estimates, the hard currency reserve may reach 3.5 billion dollars by the end of the year.